Consumer spending, personal income tick up

Consumer spending and personal income ticked up in July, a possible boost for an economy facing a sluggish recovery.

The Commerce Department said Thursday that income rose 0.3 percent last month, while consumption grew by 0.4 percent. 

The rise in consumer spending, which accounts for roughly 70 percent of economic activity, comes after two consecutive months of either no gain or a slight drop. 

Personal income has had slight monthly gains for several months in a row, with July the third consecutive month of a 0.3 percent rise. 

Those figures come a day after the Commerce Department reported that the economy grew at a 1.7 percent clip in the second quarter, and as analysts and officials are wondering whether the Federal Reserve will take further steps to stimulate the economy. 

The economy is also playing a large role in this year’s elections, with the GOP standard-bearer, Mitt Romney, making the case that he could lead a more robust recovery than President Obama.

At the same time, the government also said Thursday that weekly claims for jobless benefits increased, and the Fed said Wednesday that the economy expanded gradually in July and early August. 

The Fed’s policy-making arm has signaled, according to minutes of a meeting from several weeks ago, that it is ready to move “fairly soon” with stimulative measures. 

With that in mind, investors and officials alike will parse a speech that Ben Bernanke, the Federal Reserve chairman, is scheduled to give in Wyoming on Friday.

According to news outlets, personal spending figures were predicted to increase anywhere from 0.2 percent to 0.7 percent in July. 

The Commerce Department also said that the savings rate fell slightly in July, to 4.2 percent. The department had reported earlier in the month that retail sales increased in July. 

Thursday’s figures also come a little over a week before the government releases its August jobs figures. The economy added 163,000 jobs in July, a better than expected number. 

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